EDITORIAL: Public sector breeds inefficiency

Tue, Feb 05, 2013 - Page 8

Last month more than 5,000 master’s degree holders and a few dozen people with doctorates –– all of whom had given up any dreams of landing high-paying jobs –– joined more than 8,000 older applicants who had abandoned hopes of finding employment commensurate with their seniority, to sit the entrance level civil servant exam in the hope of landing a NT$29,000 (US$978) per month job.

Salaries for civil servants are higher than in the private sector, jobs are guaranteed, the benefits are good and a comfortable retirement can be secured. As people look for stability in uncertain times, this situation highlights the wide gap between the private and public sectors.

In the past, people with expertise were rare on the job market and were highly mobile, their remuneration being decided according to their productivity. High salaries were a necessary incentive, so salaries in the private sector outperformed public sector salaries.

If the job market operated according to the principles of supply and demand, salaries in both the public and private sectors would fluctuate with economic ups and downs and GDP. In the private sector, this is true. The relocation of industry abroad, the import of foreign labor and productivity not keeping pace with production values have resulted in salaries dropping to the level they were 14 years ago.

However, the public sector is protected by the government, which also panders to this group ahead of elections. The result is that when the economy is doing well, salaries go up, but when the economy slows, salaries do not go down. In addition, ahead of every election, the government gives public sector benefits a boost, further widening the gap between the public and private sectors.

Although the nation’s civil servants are treated well, government efficiency is constantly under fire. The American Chamber of Commerce’s latest Taiwan Business Climate Survey points to four major concerns about the nation’s competitiveness: the quality of human resources not meeting industrial demands, inexact and outdated laws and regulations, lack of government efficiency and a tax system that is not conducive to attracting foreign businesses. All these issues continue to worsen.

The government’s protective attitude toward civil servants results in a lack of stimulation which has a negative impact on risk taking and innovation. As long as someone makes it through the narrow door to a career as a civil servant , their future is safe.

The attitude seems to be that the less you do, the less that can go wrong, and that if you do nothing, nothing can go wrong. The result is a lethargic bureaucracy devoid of competitiveness. If intelligent and talented people are risk averse and uninventive and all they want is a stable guaranteed job, what will happen to the nation’s competitiveness?

Top officials are well aware that government efficiency is not up to scratch, but any reform that could have a negative impact on the vested interests of civil servants comes under intense pressure. Examination Yuan President John Kuan (關中) met with strong opposition when he said he wanted to increase efficiency and set up a more effective examination system.

To close the gap between the public and private sectors, the government should completely overhaul pensions and link remuneration to performance. To revitalize the bureaucracy and improve competitiveness, the government should also introduce a reasonable evaluation system and lay off workers who are not performing, while focusing rewards on actual performance.